How to Buy Gold in Canada

How to Buy Physical Gold?


Jewelry contains high gold content and can open more options to buy Gold. But careful testing is necessary because like coins there is a chance of forgery. There has been heavy alloying used in jewelry with durability and color justification.

You should buy jewelry from the Canadian Jewelers Association. The jewelers must have signed a code of professional conduct as proof of their honesty about the jewelry. The Canadian dealers containing precious metals for more than $90,000 are following the AML regulations issued by FINTRAC and PCMLTFA. Going to purchase Gold from these dealers you must have all necessary documents to satisfy their “know your customer policy” set by regulators.

Gold Coins

Canadian Maple Leaf is one of the most famous items for collection. It is important to note that the content of Gold in coins is less than in Gold bars. For instance, in a coin, the Gold proportion is 1.1 ounces; the rest of the weight of the coin is composed of silver and copper.

The common sellers of Gold coins in Canada are dealers, individual sellers, pawnshops, the Royal Canadian Mint, Canada Post, and banks. You may check the authenticity of Gold from the Royal Canadian Mint through their DNA technology. DNA stands for Bullion Digital non-destructive technology. The device takes a high-resolution photo of your coin and uses special software to verify security marking. You verify the authenticity of coins through simple tests. The most famous tests are the magnet test, ping test, ceramic test, and nitric acid test.

Gold Bars

To buy Gold in Canada is as easy as in any other country in the world. The only thing is the presence of an investment account. According to Forbes advisor, an individual can purchase Gold from a Canadian bank of amount $10,000/day.

Investor purchases Gold to secure their finance and investment gain in periods of shocks and strain. Gold bars or bullion are the most popular choices of investors interested in buying Gold. It is sold in grams and ounces, purity and weight are stamped on the bar. 99.5% of pure Gold is exempt from taxes.

Investors can buy Gold in Canada from Scotia bank, RBC, TD, CIBC, and BMO. They can purchase from a branch, online, and through a bank account. You will pass through the verification process as set by the bank if you want to purchase Gold more than the advised limit. However, you can purchase Gold equal to $2, 999.99 from a non-bank entity.

The major banks in Canada provide storage services to their clients without charging an extra fee. Clients can use the custodial account service of banks to store their Gold. But the Gold you get from the bank is not the same because the bank stores the Gold collectively. To avoid this risk you need to use the allocated storage option for the separate storage of your Gold. You will pay a fee to the bank for this separate allocation of Gold.

Factors Influencing the Gold Buying

At the time of buying Gold, you have to think about the most important things like:

Storage: You need to store the physical gold once you buy gold. Therefore before buying, you must have an appropriate storage location.

Insurance:  If you are thinking storing your Gold at home, you need to insure it. This strategy helps reduce the risk of theft and loss due to natural disasters.

Purity: The Gold you are buying must pass through the maturity test. In this case, you should target gold items with at least 91% and a maximum 99% purity level.

Some Other means of Gold Buying

There are other means of investing in Gold instead of buying physical Gold. For instance:

  • Investment in Gold mines companies
  • Investment in mutual funds and ETFs
  • Investment in Royal Canadian Mint Exchange Traded Receipts (ETR)
  • Investment in futures and options

Investment in Gold: Good or Bad!

Buying gold is not a decision that is going to make you rich. For instance,  an increase in the price of Gold  observed 36%, and the rise in S&P 500 was 104%. That was the case when financial market was in crisis.There is an opinion that gold is a hedge against inflation and high market shocks. In the 2007-2008 bear market the stock market plunge was 33% and gold fell by 2%.

Keeping in mind these facts, you can determine that buying Gold is not a good investment. You can even create a well-diversified portfolio without investing only in Gold.